Many people are often concerned about whether they will have the income to enjoy their golden years of retirement in comfort, without financial worries.
It’s an understandable concern to have, and it’s natural to look into the many different financial options available. One of the more unique alternatives
is called a “reverse mortgage,” and while it’s an unusual route to take, for people with specific circumstances, it can be an efficient means of supplementing
your retirement income.
What Is A Reverse Mortgage?
A reverse mortgage is a special kind of loan that is eligible to
people that meet very specific criteria. If you are 62 years or older, and own your own home and are currently living in it, then you meet the basic
requirements to qualify for a reverse mortgage.
A reverse mortgage means that you take out a new loan on your home, however, instead of paying back that loan, the loan is now paid to you in regular,
recurring payments. Of course, on the surface, this sounds like a great idea, and you may be wondering why everyone just doesn’t get a reverse mortgage.
The chief reason is because of how this impacts your future plans for your home. Obviously, if you owned your home previously, in a sense, you no longer
own it now, since you took out a reverse mortgage on it. This means that if you had any plans to pass it on to an heir, this is no longer legally possible.
This also means that you cannot move out of your home. A reverse mortgage is designed to pay out to you only as long as you live in your home and can
maintain it. If you cannot keep up with property tax, or otherwise allow the home to fall into a state of disrepair such that the property value decreases,
you will be considered in violation of the reverse mortgage.
However, if your plan is to spend the rest of your remaining years comfortably living in your own home, and you have no plans to hand it over to someone
else once you yourself have passed on, a reverse mortgage is a good way to enjoy extra income in your remaining years. It’s very important to consult
with an expert about the viability of a reverse mortgage matching up with your retirement and financial plans. It can be a valuable retirement supplement,
but only if your plans for your future align with the requirements of the reverse mortgage.